Samsung Electronics (SSNLF) will provide investors with guidance Tuesday on whether it will break up its sprawling portfolio of smart phones, memory chips, consumer electronics, ship building, electronics components, consulting, energy technology, hotels and other products, and take other steps that could benefit shareholders.
The South Korean conglomerate has been under pressure from activist shareholder Elliott Associates to clean up its corporate structure and governance, to return more cash to investors and take other shareholder-friendly steps. The activist firm states that it plan would benefit all investors, while allowing the family of Vice Chairman Jae-Yong Lee to control the vast conglomerate.
Elliott's October campaign came as battery malfunctions caused Samsung to recall the Galaxy Note 7, an embarrassing episode that played into the hands of rival Apple (AAPL) . In a report on Samsung's options, Elliott argued that the issues surrounding the mobile device, "while unfortunate, do not diminish" the fund's view that Samsung is "a leading global technology company with a world-class brand."
The activist firm, which own less than 1% stake in Samsung, argues that Samsung's ordinary shares trade at a steep valuation discounts when compared to its peers.
Elliott wants Samsung to pay a one-time dividend of 30 trillion South Korean won ($25.6 billion) and to boost its ongoing payouts to shareholders.